The Employment Rights Act 2025 (ERA 2025) finally passed into law on 18 December, after a year of fierce debate and compromise in the Houses of Parliament. The radical changes this new law will bring into force are being phased in, which began in 2025 when the law became an Act and will continue into 2026 and 2027. Here we look at the legal changes that are coming in April 2026.
The following changes which will come into effect in April 2026.
- Reforms to Statutory Sick Pay (SSP).
- Establishment of the Fair Work Agency.
- Increase to the maximum protective award in collective consultation situations.
- Removal of qualifying service requirement for paternity and parental leave.
- Inclusion of disclosures relating to sexual harassment in the list of “qualifying disclosures”.
- Trade Union balloting and recognition process reforms.
Statutory Sick Pay
Currently, Statutory Sick Pay (SSP) is only payable to workers who earn at least the lower earnings limit (LEL) on average and only once the worker has served three “waiting days”. These are days they would normally have worked but have been missed due to sickness.
Under the ERA 2025, significant changes to SSP eligibility will be going ahead with an expected implementation date of 6 April 2026.
Those changes will see the requirements to earn the LEL and to serve three waiting days before receiving SSP removed. Instead, all workers will be entitled to either 80% of their usual earnings, or the flat statutory SSP rate, whichever is lower, from the first day of absence.
These rules will mean that those earning just above the LEL, between £129 (the LEL rate from 6 April 2026) and £154.05 per week, would see a reduction in their weekly SSP rate as a result of these changes. This is because 80% of £154.05 (£123.24) will be lower than the statutory rate of SSP from 6 April 2026, £123.25 per week.
The Department for Work and Pensions has released guidance for employers on how to manage the transition period when these changes come into effect for those on sick leave on the implementation date. It says:
- workers who are serving their waiting days on 6 April 2026 will become eligible for SSP from that date onward, regardless of how many days were served at that point
- those who are already on sick leave but earning less than the LEL on 6 April 2026 will also become eligible for SSP from that date onward
- workers earning between £125 and £154.05 per week and already receiving SSP before 6 April 2026 will be protected to prevent a reduction in their pay. They will continue to receive the flat rate, rather than 80% of their earnings, until they return to work, exhaust their 28-week entitlement, or their employment ends (whichever comes first).
Additionally, the guidance provides further information on how average earnings and SSP payments will be calculated:
- 80% of usual earnings will be calculated on a worker’s average weekly earnings over an eight-week reference period
- any 80% payments will be rounded up to the nearest penny
- where there are linked periods of absence, the initial period’s average weekly earnings will be used for calculating the 80% rate.
With these changes, it will become even more important for employers to take steps to minimise sickness absence by taking charge of things within their control. This could include keeping a close eye on workload and working conditions to avoid burnout, implementing robust measures to prevent employees from feigning sickness and managing long-term absences to ensure a smooth and swift return to work.
Fair Work Agency
There are various separate agencies that deal with the enforcement of minimum standards, eg HMRC and the Gangmasters and the Labour Abuse Authority. From April 2026, a new Fair Work Agency (FWA) will be established to bring these bodies together.
The FWA will have powers to enforce the payment of statutory payments to employees, enabling them to recover underpayments quicker than through the current tribunal system.
Additionally, it will be able to bring tribunal claims on behalf of individuals who are unwilling or unable to do so themselves. Where an individual has started tribunal proceedings, the agency will be able to provide legal support, assistance, or representation.
The agency will have the power to recover any costs incurred from the business if the claim is successful.
Collective consultation
Collective consultation requirements apply in large redundancy or fire and re-hire situations, where 20 or more people are likely to be dismissed because of the process. Under the ERA 2025, the maximum award will increase from up to 90 days’ pay to up to 180 days’ pay.
Paternity and parental leave
Currently only employees with 26 weeks’ service are entitled to paternity leave, counted at the 15th week before the expected week of childbirth, or in the week their partner is notified of being matched for adoption. To take parental leave, the employee must have one year’s service.
The ERA 2025 will remove this qualifying period so that both types leave become day-one entitlements, aligning with other family leave entitlements such as maternity leave. This will give more employees access to these types of leave from the start of their employment. However, notice requirements have not changed and employees will still be expected to give the notice required under the law to take paternity and parental leave.
Sexual harassment
Disclosures made around sexual harassment, including that it has occurred, is occurring, or is likely to occur, will qualify as a “protected disclosure”.
As with other qualifying disclosures, the disclosure will not need to be substantiated, however the individual must have reasonable belief that it is true and it must be in the public interest.
As a result, employees making a qualifying disclosure in relation to sexual harassment will be protected from suffering a detriment and any dismissal for this reason would be automatically unfair.
Trade Unions
From April 2026, employers will be prevented from undertaking unfair practices as soon as the Central Arbitration Committee accepts an application for trade union recognition.
At this point, the number of individuals included in the proposed bargaining unit for the purposes of recognition would not be able to be increased, even where the employer has recruited new staff.
Additionally, balloting will be modernised with the introduction of “e-balloting” and making e mail the preferred method of communication to inform employers of a ballot outcome.
Takeaway
The legal changes set to come into force from April 2026 will have a big impact on employers, and will likely require changes to organisation policies, procedures and practices. Now is the time to begin the work of assessing what will need to be changed to ensure there is plenty of time to do so and train managers on the new rules.
Contracts of employment and Employee Handbooks will need to be amended to reflect these changes. Please contact me on carrie@rosahrservices.co.uk or 07866 703692 if you would like me to review your current documents to ensure they are legally up to date ahead of April 2026.
